Quaternary ammonium derivatives of acylated alkylenediamines are known (see for example, U.S. Pat. Nos. 1,737,458; 2,303,191; 2,589,674; 2,958,213 and 3,766,267) and exhibit varying degrees of water solubility and compatibility with other ingredients depending on the particular acylating agent, diamine and quaternizing agent used. Insolubility and incompatibility are a particular problem when the acyl moiety is derived from mixed higher fatty acids, such as acids derived from animal and vegetable sources. Quaternary ammonium derivatives of lanolin amides, for example, have heretofore typically exhibited poor compatibility with other ingredients commonly used in cosmetic formulations such as anionic emulsifiers and surfactants. Also, aqueous solutions of these lanolin "quats" have become cloudy or formed a precipitate after very short periods of time. It would be highly advantageous and desirable if the compatibility and water solubility of quaternary ammonium derivatives of lanolin amides could be improved.